In 1989 South Korea was a major producer of electronics, producing color televisions, videocassette recorders, microwave ovens, radios, watches, personal computers, and videotapes. In 1988 the electronics industry produced US$23 billion worth of goods (up 35 percent from 1987), to become the world's sixth largest manufacturer. The total value of parts and components (including semiconductors) produced in 1988 totaled US$9.7 billion, overtaking consumer electronics production (US$9.2 billion) for the first time. Manufacture of industrial electronics also grew significantly in 1988 and totaled US$4.6 billion (20 percent of total production). Electronics exports grew rapidly in the late 1980s to more than US$15 billion in 1988, up 40 percent from 1987--to become Seoul's leading export industry. Although South Korean electronic goods enjoyed substantial price competitiveness over Japanese products, the electronics industry continued to be heavily dependent on Japanese components, an important factor in South Korea's chronic trade deficit with Japan. Some South Korean firms formed joint ventures with foreign concerns to acquire advanced technology. In the late 1980s, South Korea's leading electronics firms (Samsung, Lucky-Goldstar, and Hyundai) began establishing overseas plants in such markets as the Federal Republic of Germany (West Germany), Britain, Turkey, and Ireland.
By 1990 significant shifts were occurring within the electronics industry. In 1989 South Korea had lost some of its cost advantage to newer consumer electronics producers in Southeast Asia. At the same time, production of electronic components and of industrial electronics, particularly computers and telecommunications equipment, continued to expand to such an extent that overall demand for South Korean electronics products was expected to increase modestly in the early 1990s. In 1990 Seoul projected that the microelectronics industry would grow at an annual rate of 17.2 percent in the early 1990s.
Data as of June 1990